PRIOR PRINTER'S NOS. 724, 1814, 2232, PRINTER'S NO. 4800
2458, 2471, 2473, 4793
No. 623 Session of 2003
INTRODUCED BY MAHER, BLAUM, GANNON, BOYES, JAMES, LEWIS,
MANDERINO, PALLONE, STETLER, WALKO, WASHINGTON, PRESTON AND
THOMAS, MARCH 3, 2003
AMENDMENTS TO SENATE AMENDMENTS, HOUSE OF REPRESENTATIVES,
NOVEMBER 20, 2004
AN ACT
1 Amending Title 18 (Crimes and Offenses) of the Pennsylvania
2 Consolidated Statutes, further providing for deceptive or
3 fraudulent business practices.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Section 4107(a) of Title 18 of the Pennsylvania <--
7 Consolidated Statutes is amended to read:
8 § 4107. Deceptive or fraudulent business practices.
9 (a) Offense defined.--A person commits an offense if, in the
10 course of business, [he] the person:
11 (1) uses or possesses for use a false weight or measure,
12 or any other device for falsely determining or recording any
13 quality or quantity;
14 (2) sells, offers or exposes for sale, or delivers less
15 than the represented quantity of any commodity or service;
16 (3) takes or attempts to take more than the represented
17 quantity of any commodity or service when as buyer he
1 furnishes the weight or measure;
2 (4) sells, offers or exposes for sale adulterated or
3 mislabeled commodities. As used in this paragraph, the term
4 "adulterated" means varying from the standard of composition
5 or quality prescribed by or pursuant to any statute providing
6 criminal penalties for such variance or set by established
7 commercial usage. As used in this paragraph, the term
8 "mislabeled" means varying from the standard of trust or
9 disclosure in labeling prescribed by or pursuant to any
10 statute providing criminal penalties for such variance or set
11 by established commercial usage;
12 (5) makes a false or misleading statement in any
13 advertisement addressed to the public or to a substantial
14 segment thereof for the purpose of promoting the purchase or
15 sale of property or services;
16 (6) makes a false or misleading written statement for
17 the purpose of obtaining property or credit;
18 (7) makes a false or misleading written statement for
19 the purpose of promoting the sale of securities, or omits
20 information required by law to be disclosed in written
21 documents relating to securities;
22 (8) makes a false or misleading material statement to
23 induce an investor to invest in a business venture. The
24 offense is complete when any false or misleading material
25 statement is communicated to an investor regardless of
26 whether any investment is made. For purposes of grading, the
27 "amount involved" is the amount or value of the investment
28 solicited or paid, whichever is greater. As used in this
29 paragraph, the following words and phrases shall mean:
30 "Amount" as used in the definition of "material statement"
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1 includes currency values and comparative expressions of
2 value, including, but not limited to, percentages or
3 multiples. "Business venture" means any venture represented
4 to an investor as one where he may receive compensation
5 either from the sale of a product, from the investment of
6 other investors or from any other commercial enterprise.
7 "Compensation" means anything of value received or to be
8 received by an investor. "Invest" means to pay, give or lend
9 money, property, service or other thing of value for the
10 opportunity to receive compensation. The term also includes
11 payment for the purchase of a product. "Investment" means the
12 money, property, service or other thing of value paid or
13 given, or to be paid or given, for the opportunity to receive
14 compensation. "Investor" means any natural person,
15 partnership, corporation, limited liability company, business
16 trust, other association, government entity, estate, trust,
17 foundation or other entity solicited to invest in a business
18 venture, regardless of whether any investment is made.
19 "Material statement" means a statement about any matter which
20 could affect an investor's decision to invest in a business
21 venture, including, but not limited to, statements about:
22 (i) the existence, value, availability or
23 marketability of a product;
24 (ii) the number of former or current investors, the
25 amount of their investments or the amount of their former
26 or current compensation;
27 (iii) the available pool or number of prospective
28 investors, including those who have not yet been
29 solicited and those who already have been solicited but
30 have not yet made an investment;
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1 (iv) representations of future compensation to be
2 received by investors or prospective investors; or
3 (v) the source of former, current or future
4 compensation paid or to be paid to investors or
5 prospective investors.
6 "Product" means a good, a service or other tangible or
7 intangible property of any kind; [or]
8 (9) obtains or attempts to obtain property of another by
9 false or misleading representations made through
10 communications conducted in whole or in part by telephone
11 involving the following:
12 (i) express or implied claims that the person
13 contacted has won or is about to win a prize;
14 (ii) express or implied claims that the person
15 contacted may be able to recover any losses suffered in
16 connection with a prize promotion; or
17 (iii) express or implied claims regarding the value
18 of goods or services offered in connection with a prize
19 or a prize promotion.
20 As used in this paragraph, the term "prize" means anything of
21 value offered or purportedly offered. The term "prize
22 promotion" means an oral or written express or implied
23 representation that a person has won, has been selected to
24 receive or may be eligible to receive a prize or purported
25 prize[.]; or
26 (10) does either of the following when the person is in
27 a client relationship with a certified public accountant,
28 public accountant or public accounting firm:
29 (i) provides false or misleading information to the
30 certified public accountant, public accountant or public
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1 accounting firm in connection with performance of an
2 attestation function for the client which results in an
3 attestation by the certified public accountant, public
4 accountant or public accounting firm of a materially
5 misleading financial statement, audit, review or other
6 document; or
7 (ii) fails to provide information to the certified
8 public accountant, public accountant or public accounting
9 firm which the person knows is material to the
10 performance of an attestation function and which results
11 in an attestation by the certified public accountant,
12 public accountant or public accounting firm of a
13 materially misleading financial statement, audit, review
14 or other document.
15 * * *
16 SECTION 1. SECTION 4107 OF TITLE 18 OF THE PENNSYLVANIA <--
17 CONSOLIDATED STATUTES, AMENDED APRIL 5, 2004 (P.L.211, NO.26),
18 IS AMENDED TO READ:
19 § 4107. DECEPTIVE OR FRAUDULENT BUSINESS PRACTICES.
20 (A) OFFENSE DEFINED.--A PERSON COMMITS AN OFFENSE IF [THE
21 PERSON INTENTIONALLY, KNOWINGLY OR RECKLESSLY ENGAGES IN ANY OF
22 THE FOLLOWING ACTS], IN THE COURSE OF BUSINESS, THE PERSON:
23 (1) USES OR POSSESSES FOR USE A FALSE WEIGHT OR MEASURE,
24 OR ANY OTHER DEVICE FOR FALSELY DETERMINING OR RECORDING ANY
25 QUALITY OR QUANTITY;
26 (2) SELLS, OFFERS OR EXPOSES FOR SALE, OR DELIVERS LESS
27 THAN THE REPRESENTED QUANTITY OF ANY COMMODITY OR SERVICE;
28 (3) TAKES OR ATTEMPTS TO TAKE MORE THAN THE REPRESENTED
29 QUANTITY OF ANY COMMODITY OR SERVICE WHEN AS BUYER HE
30 FURNISHES THE WEIGHT OR MEASURE;
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1 (4) SELLS, OFFERS OR EXPOSES FOR SALE ADULTERATED OR
2 MISLABELED COMMODITIES. AS USED IN THIS PARAGRAPH, THE TERM
3 "ADULTERATED" MEANS VARYING FROM THE STANDARD OF COMPOSITION
4 OR QUALITY PRESCRIBED BY OR PURSUANT TO ANY STATUTE PROVIDING
5 CRIMINAL PENALTIES FOR SUCH VARIANCE OR SET BY ESTABLISHED
6 COMMERCIAL USAGE. AS USED IN THIS PARAGRAPH, THE TERM
7 "MISLABELED" MEANS VARYING FROM THE STANDARD OF TRUST OR
8 DISCLOSURE IN LABELING PRESCRIBED BY OR PURSUANT TO ANY
9 STATUTE PROVIDING CRIMINAL PENALTIES FOR SUCH VARIANCE OR SET
10 BY ESTABLISHED COMMERCIAL USAGE;
11 (5) MAKES A FALSE OR MISLEADING STATEMENT IN ANY
12 ADVERTISEMENT ADDRESSED TO THE PUBLIC OR TO A SUBSTANTIAL
13 SEGMENT THEREOF FOR THE PURPOSE OF PROMOTING THE PURCHASE OR
14 SALE OF PROPERTY OR SERVICES;
15 (6) MAKES OR INDUCES OTHERS TO RELY ON A FALSE OR
16 MISLEADING WRITTEN STATEMENT FOR THE PURPOSE OF OBTAINING
17 PROPERTY OR CREDIT;
18 (7) MAKES OR INDUCES OTHERS TO RELY ON A FALSE OR
19 MISLEADING WRITTEN STATEMENT FOR THE PURPOSE OF PROMOTING THE
20 SALE OF SECURITIES, OR OMITS INFORMATION REQUIRED BY LAW TO
21 BE DISCLOSED IN WRITTEN DOCUMENTS RELATING TO SECURITIES;
22 (8) MAKES OR INDUCES OTHERS TO RELY ON A FALSE OR
23 MISLEADING MATERIAL STATEMENT TO INDUCE AN INVESTOR TO INVEST
24 IN A BUSINESS VENTURE. THE OFFENSE IS COMPLETE WHEN ANY FALSE
25 OR MISLEADING MATERIAL STATEMENT IS COMMUNICATED TO AN
26 INVESTOR REGARDLESS OF WHETHER ANY INVESTMENT IS MADE. FOR
27 PURPOSES OF GRADING, THE "AMOUNT INVOLVED" IS THE AMOUNT OR
28 VALUE OF THE INVESTMENT SOLICITED OR PAID, WHICHEVER IS
29 GREATER. AS USED IN THIS PARAGRAPH, THE FOLLOWING WORDS AND
30 PHRASES SHALL MEAN: "AMOUNT" AS USED IN THE DEFINITION OF
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1 "MATERIAL STATEMENT" INCLUDES CURRENCY VALUES AND COMPARATIVE
2 EXPRESSIONS OF VALUE, INCLUDING, BUT NOT LIMITED TO,
3 PERCENTAGES OR MULTIPLES. "BUSINESS VENTURE" MEANS ANY
4 VENTURE REPRESENTED TO AN INVESTOR AS ONE WHERE HE MAY
5 RECEIVE COMPENSATION EITHER FROM THE SALE OF A PRODUCT, FROM
6 THE INVESTMENT OF OTHER INVESTORS OR FROM ANY OTHER
7 COMMERCIAL ENTERPRISE. "COMPENSATION" MEANS ANYTHING OF VALUE
8 RECEIVED OR TO BE RECEIVED BY AN INVESTOR. "INVEST" MEANS TO
9 PAY, GIVE OR LEND MONEY, PROPERTY, SERVICE OR OTHER THING OF
10 VALUE FOR THE OPPORTUNITY TO RECEIVE COMPENSATION. THE TERM
11 ALSO INCLUDES PAYMENT FOR THE PURCHASE OF A PRODUCT.
12 "INVESTMENT" MEANS THE MONEY, PROPERTY, SERVICE OR OTHER
13 THING OF VALUE PAID OR GIVEN, OR TO BE PAID OR GIVEN, FOR THE
14 OPPORTUNITY TO RECEIVE COMPENSATION. "INVESTOR" MEANS ANY
15 NATURAL PERSON, PARTNERSHIP, CORPORATION, LIMITED LIABILITY
16 COMPANY, BUSINESS TRUST, OTHER ASSOCIATION, GOVERNMENT
17 ENTITY, ESTATE, TRUST, FOUNDATION OR OTHER ENTITY SOLICITED
18 TO INVEST IN A BUSINESS VENTURE, REGARDLESS OF WHETHER ANY
19 INVESTMENT IS MADE. "MATERIAL STATEMENT" MEANS A STATEMENT
20 ABOUT ANY MATTER WHICH COULD AFFECT AN INVESTOR'S DECISION TO
21 INVEST IN A BUSINESS VENTURE, INCLUDING, BUT NOT LIMITED TO,
22 STATEMENTS ABOUT:
23 (I) THE EXISTENCE, VALUE, AVAILABILITY OR
24 MARKETABILITY OF A PRODUCT;
25 (II) THE NUMBER OF FORMER OR CURRENT INVESTORS, THE
26 AMOUNT OF THEIR INVESTMENTS OR THE AMOUNT OF THEIR FORMER
27 OR CURRENT COMPENSATION;
28 (III) THE AVAILABLE POOL OR NUMBER OF PROSPECTIVE
29 INVESTORS, INCLUDING THOSE WHO HAVE NOT YET BEEN
30 SOLICITED AND THOSE WHO ALREADY HAVE BEEN SOLICITED BUT
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1 HAVE NOT YET MADE AN INVESTMENT;
2 (IV) REPRESENTATIONS OF FUTURE COMPENSATION TO BE
3 RECEIVED BY INVESTORS OR PROSPECTIVE INVESTORS; OR
4 (V) THE SOURCE OF FORMER, CURRENT OR FUTURE
5 COMPENSATION PAID OR TO BE PAID TO INVESTORS OR
6 PROSPECTIVE INVESTORS.
7 "PRODUCT" MEANS A GOOD, A SERVICE OR OTHER TANGIBLE OR
8 INTANGIBLE PROPERTY OF ANY KIND; OR
9 (9) OBTAINS OR ATTEMPTS TO OBTAIN PROPERTY OF ANOTHER BY
10 FALSE OR MISLEADING REPRESENTATIONS MADE THROUGH
11 COMMUNICATIONS CONDUCTED IN WHOLE OR IN PART BY TELEPHONE
12 INVOLVING THE FOLLOWING:
13 (I) EXPRESS OR IMPLIED CLAIMS THAT THE PERSON
14 CONTACTED HAS WON OR IS ABOUT TO WIN A PRIZE;
15 (II) EXPRESS OR IMPLIED CLAIMS THAT THE PERSON
16 CONTACTED MAY BE ABLE TO RECOVER ANY LOSSES SUFFERED IN
17 CONNECTION WITH A PRIZE PROMOTION; OR
18 (III) EXPRESS OR IMPLIED CLAIMS REGARDING THE VALUE
19 OF GOODS OR SERVICES OFFERED IN CONNECTION WITH A PRIZE
20 OR A PRIZE PROMOTION.
21 AS USED IN THIS PARAGRAPH, THE TERM "PRIZE" MEANS ANYTHING OF
22 VALUE OFFERED OR PURPORTEDLY OFFERED. THE TERM "PRIZE
23 PROMOTION" MEANS AN ORAL OR WRITTEN EXPRESS OR IMPLIED
24 REPRESENTATION THAT A PERSON HAS WON, HAS BEEN SELECTED TO
25 RECEIVE OR MAY BE ELIGIBLE TO RECEIVE A PRIZE OR PURPORTED
26 PRIZE[.]; OR
27 (10) DOES EITHER OF THE FOLLOWING WHEN THE PERSON IS IN
28 A CLIENT RELATIONSHIP WITH A CERTIFIED PUBLIC ACCOUNTANT,
29 PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTING FIRM:
30 (I) PROVIDES FALSE OR MISLEADING INFORMATION TO THE
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1 CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT OR PUBLIC
2 ACCOUNTING FIRM IN CONNECTION WITH PERFORMANCE OF AN
3 ATTESTATION FUNCTION FOR THE CLIENT WHICH RESULTS IN AN
4 ATTESTATION BY THE CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
5 ACCOUNTANT OR PUBLIC ACCOUNTING FIRM OF A MATERIALLY
6 MISLEADING FINANCIAL STATEMENT, AUDIT, REVIEW OR OTHER
7 DOCUMENT; OR
8 (II) FAILS TO PROVIDE INFORMATION TO THE CERTIFIED
9 PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTING
10 FIRM WHICH THE PERSON KNOWS IS MATERIAL TO THE
11 PERFORMANCE OF AN ATTESTATION FUNCTION AND WHICH RESULTS
12 IN AN ATTESTATION BY THE CERTIFIED PUBLIC ACCOUNTANT,
13 PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTING FIRM OF A
14 MATERIALLY MISLEADING FINANCIAL STATEMENT, AUDIT, REVIEW
15 OR OTHER DOCUMENT.
16 (A.1) GRADING OF OFFENSES.--
17 (1) A VIOLATION OF THIS SECTION CONSTITUTES:
18 (I) A FELONY OF THE THIRD DEGREE IF THE AMOUNT
19 INVOLVED EXCEEDS $2,000;
20 (II) A MISDEMEANOR OF THE FIRST DEGREE IF THE AMOUNT
21 INVOLVED IS $200 OR MORE BUT $2,000 OR LESS;
22 (III) A MISDEMEANOR OF THE SECOND DEGREE IF THE
23 AMOUNT INVOLVED IS LESS THAN $200; OR
24 (IV) WHEN THE AMOUNT INVOLVED CANNOT BE
25 SATISFACTORILY ASCERTAINED, THE OFFENSE CONSTITUTES A
26 MISDEMEANOR OF THE SECOND DEGREE.
27 (2) AMOUNTS INVOLVED IN DECEPTIVE OR FRAUDULENT BUSINESS
28 PRACTICES PURSUANT TO ONE SCHEME OR COURSE OF CONDUCT,
29 WHETHER FROM THE SAME PERSON OR SEVERAL PERSONS, MAY BE
30 AGGREGATED IN DETERMINING THE GRADE OF THE OFFENSE.
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1 (3) WHERE A PERSON COMMITS AN OFFENSE UNDER SUBSECTION
2 (A) AND THE VICTIM OF THE OFFENSE IS 60 YEARS OF AGE OR
3 OLDER, THE GRADING OF THE OFFENSE SHALL BE ONE GRADE HIGHER
4 THAN SPECIFIED IN PARAGRAPH (1).
5 (A.2) JURISDICTION.--
6 (1) THE DISTRICT ATTORNEYS OF THE SEVERAL COUNTIES SHALL
7 HAVE THE AUTHORITY TO INVESTIGATE AND TO INSTITUTE CRIMINAL
8 PROCEEDINGS FOR ANY VIOLATION OF THIS SECTION.
9 (2) IN ADDITION TO THE AUTHORITY CONFERRED UPON THE
10 ATTORNEY GENERAL BY THE ACT OF OCTOBER 15, 1980 (P.L.950,
11 NO.164), KNOWN AS THE COMMONWEALTH ATTORNEYS ACT, THE
12 ATTORNEY GENERAL SHALL HAVE THE AUTHORITY TO INVESTIGATE AND
13 TO INSTITUTE CRIMINAL PROCEEDINGS FOR ANY VIOLATION OF THIS
14 SECTION OR ANY SERIES OF SUCH VIOLATIONS INVOLVING MORE THAN
15 ONE COUNTY OF THIS COMMONWEALTH OR INVOLVING ANY COUNTY OF
16 THIS COMMONWEALTH AND ANOTHER STATE. NO PERSON CHARGED WITH A
17 VIOLATION OF THIS SECTION BY THE ATTORNEY GENERAL SHALL HAVE
18 STANDING TO CHALLENGE THE AUTHORITY OF THE ATTORNEY GENERAL
19 TO INVESTIGATE OR PROSECUTE THE CASE, AND, IF ANY SUCH
20 CHALLENGE IS MADE, THE CHALLENGE SHALL BE DISMISSED AND NO
21 RELIEF SHALL BE AVAILABLE IN THE COURTS OF THIS COMMONWEALTH
22 TO THE PERSON MAKING THE CHALLENGE.
23 (B) DEFENSES.--IT IS A DEFENSE TO PROSECUTION UNDER THIS
24 SECTION IF THE DEFENDANT PROVES BY A PREPONDERANCE OF THE
25 EVIDENCE THAT HIS CONDUCT WAS NOT [INTENTIONALLY,] KNOWINGLY OR
26 RECKLESSLY DECEPTIVE.
27 Section 2. This act shall take effect in 60 days.
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